Economy

10:10 am

Mon June 4, 2012

EU Tries Keep Eurozone From Going Down The Tubes

We have just come from a week when officials of the European Union openly warned of the possible downfall of the euro. Billionaire investor George Soros has gone even further. He says the euro crisis could bring down the entire E.U. Teri Schultz reports from Brussels.

TERI SCHULTZ, BYLINE: Soros predicts it will be just three more months before struggling E.U. governments have to pay too much to borrow money. And if the euro falls, Soros says, the whole E.U. could pop like a bubble. Economist Jean Pisani-Ferry of the Bruegel economic think tank in Brussels chuckles at Soros's three-month prediction but declines to provide his own. Unfortunately, he says, as far as short-term salvation strategies...

JEAN PISANI-FERRY: There's no rabbit to be pulled out of the hat.

SCHULTZ: Pisani-Ferry supports some current proposals - a banking union to back up weaknesses in that sector and euro bonds jointly guaranteed by eurozone governments. Germany is slowly lowering its resistance to these ideas, if they're accompanied by more E.U. control over fiscal policy.

PISANI-FERRY: I think it's part of, you know, what can strengthen resistance.

SCHULTZ: The European Central Bank board holds its monthly meeting this week to review interest rates. ECB chief Mario Draghi insists the current system of patchwork policy fixes is unsustainable, demanding leaders formulate a longer-term vision. Heads of state meet her June 28. For NPR News, I'm Teri Schultz in Brussels. Transcript provided by NPR, Copyright NPR.